Month Price per 2L bottle $ Quantity sold Month Price per 2L bottle $ Quantity sold April 300 10,000 Company PQN April 305 12,000 May 320 9,500 May 350 9,600 quired: (a) Explain to the management of Company ABC and Company PQN, the importance of the theory of price elasticity for producers of goods and services.

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Month
Price per 2L bottle $
Quantity sold
Month
Price per 2L bottle $
Quantity sold
Company ABC
April
300
10,000
Company PQN
April
305
12,000
May
320
9,500
May
350
9,600
equired:
(a) Explain to the management of Company ABC and Company PQN, the importance of the
theory of price elasticity for producers of goods and services.
The importance of the theory of price elasticity for producers of goods and services is that
lasticity is an important economic measure, particularly because it indicates how much of
good or service buyers consume when the price changes.
(b) Calculate from the information in the table above, the price elasticity of demand for
Company ABC and Company PQN between April and May 2023, using the mid-point
formula.
Transcribed Image Text:Month Price per 2L bottle $ Quantity sold Month Price per 2L bottle $ Quantity sold Company ABC April 300 10,000 Company PQN April 305 12,000 May 320 9,500 May 350 9,600 equired: (a) Explain to the management of Company ABC and Company PQN, the importance of the theory of price elasticity for producers of goods and services. The importance of the theory of price elasticity for producers of goods and services is that lasticity is an important economic measure, particularly because it indicates how much of good or service buyers consume when the price changes. (b) Calculate from the information in the table above, the price elasticity of demand for Company ABC and Company PQN between April and May 2023, using the mid-point formula.
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